China PET bottle chip supply demand may enhance modestly within short, but still under restriction in medium-long run

Around end Nov-early Dec, with the speculative mentality of bargain-hunting in the market, there was a concentrated replenishment. Currently some of the factory inventory is gradually transferred to the middle and terminal links, thus slowing down the accumulation speed of their own inventory. Recently, the processing spead has also returned to around 600yuan/ton, approaching the high point in the second half of the year. Meanwhile, the export order and delivery performance in recent times are still satisfactory. In October, PET bottle chip export order intake exceeded 550,000 tons, and according to some manufacturers, delivery in the past two months has also increased compared to the previous period.

However, the PET bottle chip market is still under high inventory pressure. Some plants that cut down output or shut down are gradually returning to normal operation. On the one hand, because PET bottle chip is in off-season, most of the downstream end-user giants have restocked PET for 2024 delivery, which is not helpful for the inventory of bottle chip factories in recent months. The pickup pace of beverage factory is always one of the main reasons for assessing whether the PET bottle chip market price can be supported. On the other hand, from the perspective of total inventory, the inventory pressure in the middle link has reached a historical high, and the turnover rate is not high, and the market has more choices for substitute brands. Even if the bottle chip factory has a temporary surge in transactions, the market price didn't see volatility. At the end of the year, bottle chip factories will urge traders to pick up goods, and some traders and stockholders have increased financial pressure. Therefore, on the one hand, the bottle factory urges traders to pick up the goods to gradually realize the profit of previous orders, and on the other hand, traders tend to delay replenishment until the end or beginning of the month to reduce cash flow losses, but in essence, their impact on digesting inventory is limited.

In addition, under the background of increasing industry attention, the operation of the PET bottle chip industry in the future may face a more complex situation. The traditional supply-demand balance sheet may no longer be fully applicable, and while analyzing market fundamental data, it may be necessary to increase the proportion of some random factors, such as changes in inventory structure, and the impact of future capital intervention on market sentiment.

Overall, the PET bottle chip market is influenced by various factors, and there are certain obstacles to both price increases and declines. If there is to be a breakthrough in the market, it may depend on whether the upstream raw materials have sustained upward momentum (currently, there is limited driving force), as well as the recovery speed of downstream end-user customers (with the increase in beverage plants O/R in the later period, the pickup situation may improve). In addition, from the end of December to January, according to CCFGroup statistics, new capacity such as Xinjiang Tunhe, Xinjiang Yipu, Yisheng Hainan and Anhui Haoyuan, will be put into production one after another, and the market supply is expected to rise again. However, at the same time, some large factories may still have maintenance plans.